Managing and Governing Data in Today’s Cloud-First Financial Services Industry
Cloud is the modern technology foundation for most of today’s digitally driven financial services industry. Regardless of size, companies across all sectors, from banking to brokerages, are investing in new cloud-based solutions for modern business applications, transaction platforms, and analytics to improve customer experience, simplify IT, and reduce ongoing operational costs. According to Forbes, 67% of enterprise infrastructure will be cloud-based by the end of this year alone. And cloud spend is on the rise. Synergy Research reported an over $150B investment in cloud infrastructure as a service, platform as a service, and software as a service in 2019, compared to $80B in 2010.
What’s Fueling Cloud Spend Across Financial Services?
Incorporating AI/ML: Artificial intelligence and machine learning technologies have proven to accelerate the ability for banks, insurance companies, and retail brokerages to successfully combat fraud, manage risk, cross sell and upsell, and provide tailored services to existing clients. To harness the power and potential of these solutions, financial institutions will look to leverage external data from third-party vendors and partners and in-house data to mine for the best answers and recommendations. Today’s cloud-native and cloud-first solutions offer financial institutions the ability to capture, process, analyze, and leverage the intelligence from this data much faster, more efficiently, and more effectively than trying to do it internally.
Improving Customer Experience Through Digital Modernization: Banks and insurance companies have been modernizing and/or replacing legacy core systems, many of which have been around for decades, with cloud-native and cloud-first solutions. These include offerings from organizations like FIS Global, nCino, and my former employer EllieMae in the banking industry, and offerings from Guidewire and DuckCreek for cloud-native policy administration, claims, and underwriting solutions in the insurance sector.
Enabling Business Agility and Cost Reduction: Cloud also makes sense these days as companies are looking to reduce their IT overhead significantly. Today’s cloud providers can help to solve many of the issues around cost because cloud is remotely managed, maintained, and upgraded. The cloud model enables companies to focus on their core competencies rather than spending time and human resource managing data centers.
Top Data Challenges with Cloud Adoption
We’re seeing some of the largest financial services companies partnering with cloud giants, including Amazon Web Services, Microsoft Azure, and Google Cloud, for everything from data lakes and analytics solutions to building cloud-native applications to run the business. As more organizations lean toward cloud infrastructure, cloud platforms, and cloud applications, business executives and day-to-day business users will continue to have questions about their data, including:
- How do we ensure that the necessary data is where it needs to be?
- How do we ensure that we identify and deal with data quality issues so that business users can trust the data?
- Do we have the ability to look at the complete lineage of our data to and from the cloud? Can we explain where all that data comes from and where it is going?
- Are we using the right data for the right business purpose?
- Is our most sensitive data protected as we move it to the cloud and back?
Truth be told, it’s hard enough trying to manage, integrate, govern, and protect your data when your business applications and systems are all on-premises. As more financial institutions adopt new cloud-based solutions, they will need to strengthen and modernize their data management and governance capabilities to exchange data and information between new cloud investments and existing on-premises systems and/or other existing cloud environments.
What are the root causes that make it difficult to answer these questions? What do financial institutions need to consider when modernizing to the cloud? Get answers to these questions and see how Informatica’s Intelligent Data Platform can help in my presentation at the 2020 FIMA Virtual Event. Watch it now.